How Social Commerce Works: The Social Psychology of Social Shopping

As a social psychologist, I’m interested in how social commerce works. Not for academic reasons, but for a purely practical reason. Understanding why it makes commercial sense to help people to connect where they buy and buy where they connect provides businesses with a strategic advantage; the opportunity to reap the rewards of a powerful insight-led social commerce strategy, as opposed to merely deploying social commerce as a set of tactical tools.

Jumping to the conclusion of a rather long post, I think that a psychologically informed understanding of how social commerce works points to the possibility of six particularly effective social commerce strategies.

But first the obvious. Social commerce makes commercial sense because it is good marketing, marketing with a big M that is, in the sense of Marketing as the business of solving people’s problems at a profit (as opposed to mere messaging). By providing online shoppers with useful tools to make better and more informed choices, social commerce helps shoppers do smart and savvy shopping. And in doing so, retailers can deliver expectation-beating shopper experiences that drive loyalty (purchase-repurchase) and advocacy (word of mouth).

The second more-or-less obvious reason why social commerce makes commercial sense is that social commerce allows brands and retailers to sell where customers spend their time; and today that means on social media platforms. Social commerce solutions are thus a cost-effective way to capture traffic and market reach. And if deployed smartly, they even raise the possibility of the impulse e-purchase, a huge and largely unplundered opportunity in e-commerce. For instance, it’s now possible to do virtual pop-up retail, throwing up campaign stores to accompany and monetize marketing campaigns.

But the third, and possibly most powerful reason why social commerce makes commercial sense is a little less self-evident; it’s based on the social psychology of social shopping. The takeout of what’s outlined below is that social shopping tools, when properly deployed, can harness the processes of social influence that take place when we’re shopping to improve propensity to purchase.

The Social Psychology of Social Shopping

At one level the social psychology of social shopping is easy; social shopping harnesses the human capacity for social learning, learning from the knowledge and experience of others we know and/or trust. This social learning faculty is part of our social intelligence, the ability to understand and learn from each other and profit from social situations. But social shopping tools also work at a more fundamental level, by playing to cognitive biases in how people are influenced by people when shopping.

In a nutshell, social psychology, the branch of psychology that deals with how people think about, influence, and relate to one another, has found that shoppers do what is popularly known as ‘thinslicing’ when they are out shopping. Thinslicing is a style of thinking (psychologists call it heuristic-thinking) that involves ignoring most of the information available, and instead using (slicing off) a few salient information cues, often social in nature, along with a set of simple, but usually smart mental rules of thumb (known as heuristics) to make intuitive decisions. Psychologists have identified six universal heuristics (mental rules of thumb) that shoppers use to process thinsliced information; social shopping tools are powerful because they harness these heuristics to make purchase decisions more likely. (See here and here for a quick overview).

Heuristic #1: Social Proof The Rule: ‘Follow the Crowd’

How it Works: To resolve uncertainty of what to do or buy, we often look to what others are doing or have done, and take our cue from them. When something stands out as particularly popular or dominant, we instinctively perceive this as social proof that it is the correct, most valid option – it’s classic peer power in action.

The Classic Experiment: The 42nd Street Experiment (1969). A single passerby was asked to stop in 42nd Street NYC and gaze skyward for 60 seconds. Other passersbys walked past, ignoring him. But when15 passersby were asked to do the same thing, 40% of people on the busy street also stopped to look up, almost bringing 42nd Street to a complete a halt within a minute.

Classic Marketing Application: Using the ‘Power of Lists’ to associate a brand with the #1 spot ‘best selling’, ‘market leader’ ‘#1 choice’ or ‘fastest growing’.

Social Commerce Application: Social shopping tools that use social proof to stimulate heuristic-thinking shopping decisions include:

Pick Lists such as wish-lists and gift-lists offer social proof about what people want and what is desirable

How it Works: People have a natural tendency to defer to the conclusions of an expert or authority, regardless of what they say. With specialist knowledge, experience and expertise, they save us time and energy thinking things through.

The Classic Experiment: The Shockbox Experiments (1961). A majority (61-66%) of people recruited to participate in memory tests gave each other increasingly severe electric shocks up to and including a “fatal” 450V dose as part of the test, if asked to do so by an authority figure – a distinguished looking experimental scientist (participants receiving the shock were stooges, there was no real shock).

Classic Marketing Application: ‘Four out of five doctors recommend’ type supports in advertising (including using actors associated with authority roles, and putting actors in white coats to appear authoritative)

Social Commerce Application: Social shopping tools that use authority to stimulate heuristic-thinking shopping decisions include:

Referral Programs stimulate recommendations from people in the know who shoppers trust

Social Media Reviews by authoritative professional reviewers (blog reviews, webzine reviews, YouTube reviews), and also by existing customers because we assign authority to voice of experience

Social Media Services that establish the retailer or brand as an authority

User Forums are a source of authoritative information – the voice of community authority

How it Works: Our minds are hardwired to value scarce resources; we instinctively assign more value to opportunities as they become less available – part out of fear of potential loss (this is known as psychological reactance).

The Classic Experiment: The Cookie Jar Experiments (1975). Participants were asked to rate chocolate chip cookies. Experimenters put 10 cookies in one jar and two of the same cookies in another jar. The cookies from the two-cookie jar received far higher ratings, even though the cookies were exactly the same. (Also of note; ‘Romeo and Juliet Effect’ research that shows teen lovers who are restricted/prevented from seeing each other value their relationship more; and the Plexiglass Experiments that proves toddlers prefer toys that are made unavailable to them (by a plexiglass barrier)).

How it Works: We have a natural inclination to emulate and agree with people we like, admire or find attractive, partly because it builds social bonds and trust (saying yes is a form of social grooming – the human equivalent to animals picking fleas from each other), and partly because it’s part of impression management, managing our image and identity by association.

The Classic Experiment: Nixon/Kennedy Debate (1960). Radio listeners and television viewers were asked to rate the performance of two presidential candidates in a live broadcast debate. Radio listeners rated Nixon’s performance higher, but television viewers did the opposite – overwhelmingly handing the debate to Kennedy. The difference? Kennedy came across visually more likeable, more attractive and fresh-faced. Nixon, on the other hand was looking haggard (just coming from a hospital visit), unshaven and sweaty. (Also of note; research showing physical attractiveness (closely linked to liking) influences things as wide ranging as our salary and our likelihood to be found guilty in court (less attractive people twice as likely to be found guilty)).

How it Works: When faced with uncertainty, we’ll opt for the one that is consistent with our beliefs and past behaviour. When our beliefs and behaviours don’t match up, we feel psychological discomfort, “cognitive dissonance”, which is a big motivator for trying to be consistent; particularly with any active, public and voluntary commitments we’ve made.

The Classic Experiment: The Big Billboard (1966). Experimenters, posing as members of the “Community Committee for Traffic Safety”, knocked on the doors of residents in an affluent residential area in Palo Alto, California, asking if they could put up a huge “Drive Carefully” billboard on their front lawn, completely obscuring their view. Not surprisingly, the vast majority (83%) refused outright, except for one group of residents, 76% of whom agreed. What this group had in common was that two weeks prior, they had been contacted and asked if they’d put a small “Be a Safe Driver” car sticker on their cars – virtually all had agreed. Once the residents had made a public commitment to a small request, they felt the need to be consistent with the large request, and accepted the big billboard.

Classic Marketing Application: Lifestyle ads (demonstrating why a product is consistent with audience lifestyle), free trials (become a user for free and stay consistent by buying later), sign up for free membership schemes, foot-in-the-door sales (ask for a small commitment (e.g. petition signing) then asking for a large commitment consistent with this (e.g. donation, purchase).

Social Commerce Application: Social shopping tools that use consistency to stimulate heuristic-thinking shopping decisions include:

Ask-Your-Network tools involve a small public commitment to an item (asking friends about it) that is consistent with purchasing it later

Social Gaming stimulates behavioural consistency between playing a branded game and later buying the branded product or service

Pick Lists are the social shopping equivalent of petitions, small free public commitments to products consistent with subsequent purchases

Share-With-Your-Network tools harness the consistency heuristic to drive loyalty and repurchase by creating publicly association between the shopper and purchased products and the e-commerce site

Shop Together tools uses peer power to stimulate purchases by creating a social event around a store visit, that is consistent with purchasing

Social Media Entertainment uses the small commitment of paying attention to make future purchases more consistent with past behaviour

Social Media Listening uses the small commitment of providing ideas or feedback to make future purchases more consistent with past behaviour

Social Media Reviews uses the small commitment of rating or reviewing to make future purchases more consistent with past behaviour

Social Media Services uses the small commitment to a product or brand involved when using its services to make a purchase more consistent with behaviour

User Forums allow shoppers to solve each others problems on behalf of the brand, a commitment that is consistent with purchase

User Galleries create a public association and commitment to a brand, consistent with ongoing custom

How it Works: We have a natural desire repay favours, whether those favours were invited or not. We feel good when we reciprocate favours, partly because of our innate sense of fairness and social contract, and partly because reciprocity is socially rewarded because it is the social glue that makes cooperation, relationships, community and society possible. Now you know why you feel bad when you receive a Seasons Greeting card from someone to whom you haven’t sent a card.

The Classic Experiment: The Coke & The Raffle Ticket (1971). Experimenters posing as art students joined group museum art tours and found they could sell significantly more student raffle tickets at the end of the tour to other members of the tour, if during the tour they did (unsolicited) favours to tour members – such as buying them a Coke. Tour members felt the need to reciprocate the favour, even though they had not asked for the Coke in the first place.

Classic Marketing Application: Sampling (reciprocating to uninvited gift with purchase), local CSR (corporate social responsibility) initiative, causal marketing and sponsorship. Door-in-the-face sales technique (making a big request upfront designed to be rejected, then making a concession, so shopper reciprocates and buys.

Social Commerce Application: Social shopping tools that use reciprocity to stimulate heuristic-thinking shopping decisions include:

Deal Feeds that allow shoppers to do other shopper a favour by passing them on

Group-Buy tools that allow friends to do their friends a favour and get them deals, which get reciprocated with participation

Referral Programs that allow friends to offer exclusive access or special deals to their friends stimulate take-up and sales

Social Media Listening tools that offer shopper a quid pro quo, we listen, you buy

Social Media Services that are genuinely useful and that can be passed on

User Forums that allow shoppers to offer each other buying/support advice – which through reciprocity translates to selling to each other

6 Social Commerce Strategies

The practical utility of looking at social commerce through the lens of social psychology is that is provides brands and retailers with a strategic approach to doing social commerce.

Rather than deploy social shopping tools based on a whims or sales pitches, the 6 social influence heuristics provide a framework for six distinct shopper-centric social commerce strategies, with their associated tools and which can be adopted and developed based on their fit with broader marketing strategies.

107 Comments

I’m very interested in the whole Social Media world and just have started to discover the new term of Social Commerce. It is such a wide field that it was hard to find a good access point to start my research.
Your very comprehensible explanation of the sociopsychological view gave me a great background for understanding the focus of this topic.

Hey Daniel, thanks for the kind words, I’m glad you find the article useful. Hopefully the insights stimulate some ideas for you; the same 6 psychological insights should also be applicable to social media marketing in general, and provides the opportunity for us to do insight-led social media marketing that builds brands.

Many thanks for superb insight into the psychology behind buying decisions. You’ve done a great job of mapping the heuristics on to social commerce. I believe I will be referring to this articles many times over the coming months in our design / priority decision making process for our social commerce suite.

Great article! I was hoping that you could provide us with some good old fashioned honest feedback on our alpha social shopping site called http://spree.ly. It allow people to shop together on a handful of online stores. Is it too complicated? Can the UI be simplified? Any advice on marketing this site?

We are working on a new feature that seems to work on non-IE browsers that allows users to click on the thumbs-up icons on images to recommend bargains to their friends.

Hi Chris, thanks for the kind comments. I checked out spree.ly again after your comment.

On simplifying the UI, have you considered an approach that would mimic DecisionStep’s toolbar with something like http://www.wibiya.com/, and / or a bookmarklet. I think the less intrusive, and the less the app detracts from the retailer site, the better. A jquery toolbar would also differentiate you from plurchase etc. Don’t know your biz model – assuming affiliate commission. If so, how about taking the bing cashback approach (né smashshopping) and offering points for purchases – that can be redeemed with vouchers… That would dive usage – and also could act as user-get-user marketing tool (X points for sign up). Anyhow good luck! Best, Paul

[…] Promotes purchase decisions primarily through the ‘liking’ social intelligence heuristic (see previous post for explanation on the psychology of how social commerce works), allowing people to shop with people […]

[…] to thinslice information and decide what to buy. So here is is: the presentation is based on an earlier article in Social Commerce Today (useful for anyone who wants details on the six psychological principles), […]

Great article! I really enjoyed reading it. Actually its funny I just took a Social Psychology class in college and I recognized all of the studies you talked about. Its really interesting to see how these principles apply to business and social commerce. Thanks again.

I thought this was a great article and it brought to light several issues that consumers deal with. Your article did a great job on applying theories to actual phenomenon occurring today. For example your “follow the crowd theorem,” made me analyze several factors that influence our buying action. I believe the iPhone is one item that many people purchased just because the “crowd” was doing the same. I tend to be annoyed by those who do things just because everyone else is doing them. But your article is helping me be a bit more understanding. The social media aspect of marketing has become so crucial because when items are “recommended” by others or we see things as top-rated, the consumer is more inclined to buy those items.

The power of social media and the media in general is playing such a prominent role and your article helps address this. You’ve provided many classic experiments that made me realize the extent to which an individual can be psychologically manipulated. Your article made me recall an episode of the Tonight Show with Conan o Brien where he told his viewers to purchase frivolous, random items (Steven Segal CD, chicken calendar). To his surprise, he attained a huge following and people actually bought what he told them to buy. He then began to recommend items every week. The success of his campaign was apparent when you looked at the “Customers Who Bought This Item Also Bought…”section; all of them were listed. This just goes to show the power of influence.

Great summary. I now realize why I am able to sell more :)
I recently started using a new platform (meylah.com) for sharing my art. Suddently, my sales went up and I didnot know why. Your blog answered it. Here is how it happened:

Meylah.com gave me a platform to do social selling through their social commerce platform. Now, selling my art has become so easy. My SEO/advertising costs have gone down.
Their rich functionality such as RSS feeds, blog powered storefronts and linking to facebook/twitter makes it easy for me to share the story behind my product.

[…] technique is a powerful use of the social psychological principal of ‘consistency’ (see social psychology of social commerce) – our desire to be, and critically, be seen to be consistent in our thoughts and behaviour. It […]

[…] trying to get an understanding of how social commerce works. I found an excellent and comprehensive post by Paul Marsden that explains the impact of social psychology on shopping. If you prefer visuals […]

Anyone know any journal or research that analyzes this using quantitative method?
I’m working on a thesis about social commerce but my lecturer won’t let me use this subject because the lack of previous researches :(

Good site! I truly love how it is easy on my eyes and the data are well written. I’m wondering how I might be notified whenever a new post has been made. I have subscribed to your RSS feed which must do the trick! Have a nice day!

[…] infographic, based, in part, on one of our articles and accompanying presentations (below) in Social Commerce Today, explains how people use their social intelligence to shop smart using six universal social rules […]

[…] Social Proof – People want what others like them want Scarcity – People derive value from exclusivity Authority – People prefer to follow others that have perceived authority Reciprocity – People like to help others that have helped them Liking – People enjoy helping others they like Consistency – People behave according to their public and voluntary commitments (more about these principles: HBR, Scientific American, awarenes, Social Commerce Today) […]

I was trying to find the source of the information you posted that the 42nd street experiment “almost bringing 42nd Street to a complete a halt within a minute”. Do you have it? I have downloaded the paper and they did not mention anything in it. Did Milgram publish something else on it?

[…] How Social Commerce Works: The Social Psychology of Social Shopping via @marsattacks The Rise of Social Commerce via Brian Solis Social Commerce Psychology via TabJuice Share this:FacebookTwitterLinkedInEmail […]

[…] on today. But the internet has changed how people make decisions about purchases and buy – 81% of consumers rely on advice from family and friends on product purchases through social media i…. All the billions being sunk into “Promotion” by the big carriers, is increasingly […]

[…] These pillars relate to six heuristics (rules of thumb) that Dr. Paul Marsden, editor of Social Commerce Today, first outlined over two years ago in his seminal post How Social Commerce Works: The Psychology of Social Shopping. […]

I found your article today which is on how social commerce works and explaining the whole psychology behind social shopping. Brilliantly written! Discussing all the nuts and bolts of social shopping. Actually I am developing a social shopping site of my own which is http://www.etoot.com, so I think your article will give me big help in successfully putting it onto the right track.